Modern Continental Enterprises has agreed to pay a $10,000 fine for beginning redevelopment work at 470 Atlantic Ave. in Boston without Chapter 91 waterfront regulation permitting approval.

It is said that what goes up must come down, but the nature of physics is not the problem facing Modern Continental Enterprises at 470 Atlantic Ave. in Boston, where state environmental officials are threatening to make the firm tear down a substantial addition to the top of the 14-story building. MCE, a heavy construction company that has turned to development in recent years, is being excoriated for pushing ahead on a renovation to the property without first receiving the proper permits.

“My client did work it was not authorized to do,” attorney R.J. Lyman acknowledged last week during a hearing before the Massachusetts Department of Environmental Protection. Lyman revealed that MCE has already agreed to pay a $10,000 fine for beginning work at the project while its application for a so-called Chapter 91 license was still pending. The license is required for companies developing or overhauling properties along the waterfront.

Although Lyman was joined by a host of speakers at the hearing who condemned MCE’s transgression, the company is nonetheless asking DEP to eschew a greater penalty, one which would have about half of the top floor torn down. Used as office space for more than a decade, the massive former warehouse had a unique layout on the top floor, with about half of it occupied as office space and the remainder largely unfinished. As part of its planned restoration of the 76-year-old structure, MCE had begun building out the top floor for use as a restaurant and observation space.

Due to the nature of Chapter 91, improvements to space which had existed previously would not be in danger of being reversed, according to Lyman, but any new additions could be held to a higher standard. Although Lyman later could not provide Banker & Tradesman with a cost estimate for removing the work, the effusive apologies set forth by himself and others from MCE indicated it is not an option the company would welcome. A final decision is expected by the DEP sometime next month.

In the interim, MCE is also asking the city and state to allow changes to its planned restoration project. If approved, the 20,000-square-foot restaurant would be cut to 12,000 square feet and placed on the ground floor, while the observation deck would be relocated to the second floor. Meanwhile, a loading dock that was to be placed near the waterfront would be incorporated on the non-water side of the building, allowing for an outdoor plaza to be added that would then connect to a harborwalk planned along the Fort Point Channel.

Part of last Thursday’s hearing was to allow comments on those and other proposed alterations to the building, which has been redubbed Independence Wharf. The Boston Harbor Association, which monitors waterfront development, praised some aspects of the reconfigured project, including the expanded outdoor plaza area. Despite that, TBHA Executive Director Vivien Li also said the rooftop restaurant and observation deck were key components in garnering support for the renovation last year, and told the DEP that her group would prefer to keep that intact.

“There are very few places along the harbor where you can go high and get a panoramic view,” Li said. “The view from the second floor is not the same.”

‘It’s Disturbing’
Although MCE also operates the highly successful Ristorante Marino in North Cambridge, the company’s director of development, Edward O’Donnell, testified that MCE was unaware of the difficulties of running an upper-level restaurant when it first advanced its plans after buying the building for $52 million in October 1999.

“The fact is, we would love to have a restaurant up there but the economics of a rooftop restaurant just don’t work,” said O’Donnell, a former staffer at the Boston Redevelopment Authority. He also maintained that the reconfigured proposal would allow greater public access to the building, even though the top floor would be utilized as private office space.

Others had a different outlook, however, including BRA staffer Richard A. Mulligan. Suggesting that it could be a “bait-and-switch” tactic to garner early support for the project, Mulligan said approval of the changes might encourage other developers to advance a popular use and then alter it down the road. “Just writing out a check” as a solution might not act as a sufficient deterrent, Mulligan added.

Conservation Law Foundation spokesman John Pike had a similar take on the potential for establishing a precedence.

“It’s disturbing because when it happens, it encourages others to do the same thing,” Pike said.

Along with civic and environmental groups, both the BRA and the city’s Conservation Commission chided MCE for failing to follow procedures in proposing a substantial redesign of the project. The BRA requires a “notice of project change” under its Article 80 statute, for example, while a Conservation Commission spokesman said the group “was not adequately informed” of MCE’s latest version. O’Donnell pledged to meet those guidelines in the short term, with a notice of project change slated to be filed sometime this week.

“We have not followed the most direct road, but we are trying in the end to get to the right road,” said O’Donnell.

As the regulatory saga winds on, MCE is continuing to push its leasing efforts, and did receive a boost last week when it finalized a 28,000-square-foot lease, with the law firm of Duane, Morris & Heckscher agreeing to take a full floor in the building. According to MCE official Robert Shepard, a 58,000-square-foot deal is now pending and could be signed as early as this week. For his part, Shepard insisted that the relocation of the restaurant “is no big deal,” and said he was unaware of any controversy.

“It’s just a better utilization of the space, and it will make it more accessible to the public,” Shepard said. “I can’t imagine why anybody would have an issue with it.”